Stock market risk is the risk that an investor assumes when investing in securities that trade on the stock market and that are issued by public corporations (companies that have many shareholders). Stock market risk can come in many forms. Rising interest rates and a rising inflation rate can increase stock market risk. A recession and economic contraction, where corporations will make less money, is another stock market risk. And, of course, there is individual public corporation stock market risk, where the individual company in question is not operating in good faith (an example would be Enron).